Hike to battle WMS deficit
By ANDREA POTEET
Sunday Times Newspapers
WYANDOTTE – Wyandotte Municipal Service cable subscribers will see their rates go up more than 20 percent in the next five years, as the company seeks to overcome a $1.5 million deficit.
WMS Assistant General Manager Paul LaManes presented the company’s deficit elimination plan — which includes staggered rate increases, beginning at 6 percent this fiscal year — at Monday’s City Council meeting.
Rates will continue to jump 4.5 percent in 2013, and 3.9 percent each year until 2016. In addition, subscribers will be charged a 3.3 percent retransmission fee and 5.5 percent franchise fee, beginning this year and set to bring in a combined $700,00 this year.
LaManes said the deficit is a result of capital investments, most of which included high definition television equipment, Internet hardware upgrades and investment in video on demand equipment. Rising royalty payments also are a factor, he said.
WMS Cable Superintendent Steve Timcoe said the company also failed to increase rates when it should have in recent years to “help ease the financial burden people were feeling.”
But for some councilors, the rate changes, based on a five-year cost of service study completed last July, should have came much sooner.
“I don’t understand how we run a business and we run it at a loss for a year,” Councilman James DeSana said. “If I had a product I was selling I’d probably be out of business by the end of the year if I sold it for less than it costs to operate my business.”
Timcoe said that in a recent cost analysis of competitors, he found that WMS rates fell an average of 25 percent behind other companies operating in the area.
Councilors accepted the deficit elimination plan with a stipulation that the department present a report on its progress every six months beginning in January.